Most micro businesses have a lot of competition… I mean a lot! Just check out businesses in your city or town that are listed in the Yellow Pages—print or virtual—and look at the competition in each category.
Everyone’s question then becomes “How do I get noticed above all the competition? How can I drive customers to my business instead of going to my competitors?”
Maybe the answer is… “Be Extraordinary!”
Here’s a short video created by Tom Peters on this subject—take a look:
Email subscribers view video on my blog.
Video from the Tom Peters “Little Big Things Video Series”
Yes, Tom is using an example from big business in his video, but we’re talking about competition here and what industry has more competition than the fast food industry?
So maybe it is time for you to sit back and take a look at your own business.
However beautiful the strategy, you should occasionally look at the results —Winston Churchill
When you do this, think of the video where Tom said: “Ho-hum could be worse than awful!”
Let’s look at Tom’s questions to us in his video: “Do you really pop? Do people say ‘wow’… this place really looks like it is up to something interesting? Or is it—heaven help you—ho-hum?”
So, what about your business:
- Does your business “pop?” Why not?
- Do your customers say “wow, this place is interesting?” (For an advertising example, click here.)
- Even if you are doing “nothing wrong” are you still just “ho-hum?”
- Or, even though you do everything right, is your business just like everyone else—just ordinary?
Also remember that what was extraordinary yesterday will be ho-hum tomorrow. Your competitors may not be leaders in your industry, but they’re all very good followers and they can help make your business look ho-hum quicker than you might think.
What have you done lately to take your business out of “ho-hum” and into “extraordinary?”
Business failure is a subject most people never want to discuss, or ever hear about. I even had a Business School administrator once tell me that business failures are so minimal they needn’t even be considered.
Yet, of the 6+ Million new businesses the Kauffman Foundation tells us will be started this year … most of them will fail!
So, I have to ask the question: “Why do so many businesses fail?”
I think a possible clue lies in the frantic questions I periodically receive from business owners asking for help with their failing business … or from aspiring entrepreneurs who are lost in the morass of trying to start a business.
Interestingly, the cause for these questions—and I believe the underlying cause of most small business problems—can be found in one of the following reasons for business failure.
Let’s take a look:
- Lack of Passion. Every entrepreneur believes they have the passion to start a business. Unfortunately, very few of these people understand the meaning of “sustained” passion. That is usually because they have no idea what pitfalls and roadblocks lie ahead of them, and that their passion will be sorely tested. Far too many new business owners lose their passion after a few “reality checks.”
- Lack of Knowledge. In almost every case, the questions I’m asked indicate a basic lack of business knowledge. If you cannot understand and analyze financial statements—or create Pro forma statements for your planning—you should not start a business until you can do both. The same holds true for planning, marketing, managing employees, and all the other aspects of running a small business. Find a mentor, read business books, attend small business classes—whatever it takes to get the knowledge you need.
- Lack of Planning. “I don’t need no freakin’ Business Plan” is a common response when I ask someone with a business problem, if they have a business plan I can look at. Very few entrepreneurs have any written planning, they just want to get their business started, because they “just know” the business will succeed. If you do not do proper—and constant—planning for your business … you will fail. Period.
- Not Understanding the Market. “If you build it, they will come” is the worst possible approach to starting a business. More businesses have failed because of this belief than any other. Study your potential market; test it; survey it; research it—whatever it takes to learn all there is to know about who you are going to sell to, and what it is they need or want. A little extra time spent here can often mean the difference between success and failure.
- Lack of Commitment to Hard Work. Rare is the new entrepreneur who has any idea about the amount of hard work required to build a successful business. Most aspiring entrepreneurs envision a life of leisure where they only have to work a few hours a week and let others do all the real work. However, it is you, the business owner, who must create the fruits of your labor before you can start to take it easy and begin to live off those fruits. Most people want quick gratification, without putting too much effort into the process, which is—the formula for failure!
You will notice that I did NOT include “lack of capital” in the above list of reasons for small business failure. In my opinion, that is usually a cop-out because the entrepreneur is lacking in one of the 5 reasons listed above.
If a new entrepreneur can overcome the reasons for failure listed above, they will be able to find money for their new business—even if they have to resort to Bootstrapping.
So, if you are a new business owner or aspiring entrepreneur, I highly suggest you review the above topics and make sure you have an understanding of what makes the difference between success and failure of a small business.
What do you think? What is your opinion on why most businesses fail?
The single biggest reason for small business failures is a lack of (real) business knowledge on the part of the business owners.
Too many people start a business without knowing about the speed bumps and pitfalls they will encounter along the way. The result of this lack of knowledge is shown in the free pdf report Business Survival Reality.
Classroom education and books can only go so far in training an entrepreneur—the real learning occurs from listening to, and interacting with, others in the business community.
That is why the Kauffman Foundation created the “1 Million Cups of Coffee” program. The concept and format are simple, and were developed by the foundation at their Kansas City headquarters.
This idea has now spread to a couple dozen cities across the U.S. from coast to coast, and is rapidly growing.
For a little more insight into this program, take a look at the recent video of their 1st anniversary celebration held in their Kansas City headquarters:
Meetings in each city are sponsored by the Kauffman Foundation, with local involvement, and are held every Wednesday morning—with lots of coffee served.
“I Million Cups” brings entrepreneurs (established, just starting, and aspiring), mentors, advisors, and experts all together in the same room to share what they have learned about entrepreneurship.
This program is for all entrepreneurs, including those who are only thinking about starting a business. The opportunity to learn from those who have gone through the trials of entrepreneurship is a matchless learning opportunity.
Every person starting, running, or aspiring to start a small business needs to be involved in some kind of local business network. If you are lucky enough to be in one of the cities holding “1 Million Cups” events, you really should spend some time at them—you will learn things rarely discussed in formal classes.
For more information on the “1 Million Cups” program, go to the 1 Million Cups website.
To find a city near you that holds “1Million Cups” events, go to the website’s events page.
If there is no such event in your city, contact your Chamber of Commerce or business development organization to see if they can’t start one up. It takes community involvement, along with support from the Kauffman Foundation, to get a successful “1 Million Cups” event program established.
I would like to hear from anyone who has attended one of these events—or have experienced the benefits from local networking with other small and micro business people.
The Industrial Age has long been relegated to the history books, and now the Technology Age is getting pretty long-in-the-tooth and is rapidly winding down.
So, what do we have to look forward to?
Well, the groundswell of information and media attention appears to point towards an Entrepreneurial Age, where a proliferation of Micro Businesses seems to be creating a lot of buzz.
What is a Micro Business?
There is no simple definition for this category of business, because most countries and many agencies within those counties all have different standards and definitions of a micro business. Depending on who you talk to, a micro business can have anywhere from 0 to 19 employees; sales under $2 million; or assets under $2 million.
In fact, there is even no agreement on how to spell the term! It appears that micro business, microbusiness, and micro-business are all the same as micro enterprise, microenterprise, and micro-enterprise.
Take your pick—but I’ll stick with “micro business” just as we all now write “small business.”
In addition, I’ll put forth my own definition of a micro business as: Any business with only a “few” employees—or none at all.
I use this definition because well over 90% of micro businesses have NO employees, while there will be others with one employee that has more revenue than a similar business with 10 employees. So I’ll stick with “Any business with only a “few” employees—or none at all..”
Is the Entrepreneurial Age a Good Thing?
There have been micro businesses around for longer than recorded history, but they have always been in the shadow of big business, governments, and big money. Now, the big businesses have left the developed nations and are concentrated in the industrial developing countries.
Big money organizations pretty much invest in each other, and various governments are floundering in disarray. That is why more and more unemployed, underemployed, and unhappily employed people are turning to the creation of micro businesses.
Various media pundits, and business “experts,” gurus, policymakers, and elitists consider all these micro businesses to be a form of self-employment and therefore should be summarily dismissed. Micro businesses are totally misunderstood by these groups.
This attitude is one of the things that so greatly contributes to the large number of failures by these smaller small businesses. They struggle all alone with little or no help from … anyone.
In spite of all the disdain by the business community and the government, one in 7 adults in the U.S. own all or part of a microbusiness. Businesses with no employees, alone contribute over $1 trillion to the GDP.
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The Entrepreneurial Age is here, and the sooner the policy-makers and business “experts” of the land understand this, the sooner we will see more and better support for these small businesses—along with a strong boost to the economy.
What Is Your Opinion?
Am I alone in believing this, or do you share the idea that we are in the early stages of an Entrepreneurial Age? Or, might this just be a temporary condition that will decline as soon as the economy gets back on track?
Business births and deaths in the U.S. have always been a mystery—for a couple of reasons:
- The government and academia only try to track about 25% of all businesses—those with the greatest potential for a high rate of return—and what little information they produce is several years in arrears.
- The remaining 75% of all U.S. businesses are generally ignored—considered not to exist—not only by the government and academia, but also by the business pundits and “experts” within the business community itself.
As a result, there is little to no information about the lives of 75% of all businesses in the U.S.—and information on the other 25% is years late, often contradictory, and highly suspect.
Since, apparently, no one else in the U.S. cares much about whether our small businesses live or die, I thought I would research the mystery of small business births and deaths myself.
The results of this endeavor are presented in a report I created titled Business Survival Reality: The Mystery of Business Births and Deaths in the U.S.
This report looks at the following issues:
- Why this information is important
- The definition of a business
- A total business census in the U.S.
- Annual business growth (including all businesses)
- Business Births by year
- Business Deaths for recent years
- Conclusions and Final Thoughts about the entire mystery
My primary intent in writing this report is to try and generate a dialogue about the 75% of all businesses in the U.S. that no one else wants to even acknowledge exist.
This is the group of small businesses that need the most help—and receive none.
There is a dearth of information (other then spam about get-rich-quick schemes) on the Internet directed specifically at this important segment of our business community. And there are no programs or any kind of assistance offered by either government or private entities.
Crowdfunding might help a few businesses attain some operating capital, but without good sound education and guidance to go along with it, the chances for success are very slim—as shown in this Business Survival Reality report.
We in the business community need to do more to help these millions of small businesses that try to start a business every year, and more often than not—fail.
Take a look at this small report—you can download it free here with no opt-in—and let me know what you think about the information presented in it.
All political campaigns (including the media) banter the issue of taxes back and forth so much that it is no wonder we lose track of the reality of the entire issue.
That is likely why the Independent Community Bankers of America, the National Federation of Independent Business, the S Corporation of America, and the United States Chamber of Commerce got together and commissioned the accounting firm Ernst & Young to conduct a financial analysis of the “Long-run Macroeconomic Impact of Increasing Tax Rates on High-income Taxpayers in 2013.”
We are told that the intent is to tax the wealthy, and we immediately think about the ridiculous incomes of Wall Street executives … but in truth, the tax increases are aimed primarily at “flow-through” businesses—S Corps, LLCs, partnerships, and sole proprietors.
Flow-through businesses employ 54% of America’s private sector work force, and pay 44% of the federal business income tax.
Moreover, flow-through businesses—with over 100 employees—employ more than 20 million workers in the U.S.
Right now, there are two new income tax increases looming on the horizon for these flow-through businesses; (1) the increase included in the “Patient Protection and Affordable Care Act of 2010,” and (2) the proposed increase in taxes for the high-income taxpayer that was submitted to Congress by President Obama.
These two tax increases combine to create the following tax rates:
- Top tax rate on ordinary income increases from 35% to 40.9%.
- Top tax rate on dividends will jump from 15% to 44.7%.
- Top tax rate on capital gains will increase from 15% to 24.7%.
Well, “so what?” you say….
Few of us (including the government) have the knowledge or tools to accurately predict the effect of these tax increases, that is why the above groups hired financial experts—Ernst & Young—to make that analysis.
Here is a synopsis of what Ernst & Young determined, based on today’s economy:
- Output would fall by 1.3%, or about $200 Billion over the long run.
- Employment would fall by 0.5%, or roughly 710,000 fewer jobs, in the long run.
- Capital stock would fall by 1.4% over time.
- Investment would fall by 2.4% over time.
- Real after-tax wages would fall by 1.8%, reflecting a decline in worker’s living standards compared to what would have occurred otherwise.
Following is a quoted summary paragraph from the report:
This report finds that these higher marginal tax rates result in a smaller economy, fewer jobs, less investment, and lower wages. Specifically, this report finds that the higher tax rates will have significant adverse economic effects in the long-run: lowering output, employment, investment, the capital stock, and real after-tax wages when the resulting revenue is used to finance additional government spending.
In lay-terms, I think that means any long-term economic recovery is “toast” if the pending and proposed tax increases are implemented.
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So, as a small business owner, what do you think of the tax increases on “flow-through” income? Will they directly affect your business? Will they indirectly affect your business? Will the tax increases encourage you to hire more employees—or will they discourage you to hire more employees? Share your thoughts with us.